📘 UNIT 3 – TYPES OF INFORMATION SYSTEMS & THEIR APPLICATIONS

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⭐ INTRODUCTION TO INFORMATION SYSTEM TYPES

Every organization (business, college, hospital, bank, factory) runs using different departments, different works, and different goals.
Because of this, one single system cannot manage everything.

👉 So organizations use different types of Information Systems based on their needs.

These systems help in:

  • Daily operations
  • Office work
  • Decision-making
  • Managing employees
  • Managing finance
  • Managing marketing
  • Managing inventory
  • Managing production
  • Managing customers
  • Managing data
  • Connecting departments

In Unit 3, we study Operational-Level Systems, Knowledge-Level Systems, and Management-Level Systems.

These include:

  1. Transaction Processing System (TPS)
  2. Office Automation System (OAS)
  3. Knowledge Management System (KMS)
  4. Enterprise Information Systems (EIS)
    • HRIS
    • MKIS
    • FIS
    • Production Information Systems
    • CRM
    • SCM

This chapter is the foundation for your Unit 3 exam questions and viva.

🔵 1. TRANSACTION PROCESSING SYSTEM (TPS)

(Super Important — Always asked in exam)

🔷 1.1 Meaning of Transaction in MIS

A transaction is any small business activity that updates or changes stored data.

Examples of transactions:

  • A student paying fees
  • A customer buying an item
  • An employee punching attendance
  • A bank updating your balance
  • A hospital registering a new patient

All of these are transactions.

🔷 1.2 Definition of TPS

👉 From Laudon & Laudon:

“A Transaction Processing System is a computerized system that performs and records the daily routine transactions necessary to conduct the business.”

👉 In simple words:

TPS is a system that records everyday activities like billing, payments, orders, attendance, bookings – fast and accurately.

🔷 1.3 Why TPS is needed?

Businesses perform thousands of small tasks every day.
If they do it manually → slow, mistakes, confusion.

TPS helps by:

  • Speeding up work
  • Avoiding errors
  • Storing records safely
  • Improving communication
  • Helping managers plan

🔷 1.4 Characteristics of TPS (From books, simplified)

✔ 1. Handles large volume of data

Example: Big Bazaar billing 40,000 customers daily.

✔ 2. Ensures speed

No customer will wait 20 minutes for a bill.

✔ 3. Provides accuracy

No wrong balance in bank account.

✔ 4. Ensures reliability

System cannot crash during peak time.

✔ 5. Produces standardized output

Receipt looks same every time.

✔ 6. Works in real-time or batch mode

Real-time → ATM
Batch → Salary on month-end

✔ 7. Highly automated

Minimal human effort.

🔷 1.5 Components of TPS

✔ INPUT

  • Customer details
  • Product information
  • Amount paid
  • Card details
  • Stock details

✔ PROCESSING

  • Verifying data
  • Calculating price
  • Updating inventory
  • Checking account balance

✔ OUTPUT

  • Bill
  • Confirmation message
  • Report
  • Invoice
  • Notification

🔷 1.6 Types of TPS

(From Laudon & Laudon’s classification)

1️⃣ Batch Processing

Transactions collected, processed at one time.

🟦 Example:

  • Payroll processing at month-end
  • Bill generation for electricity

2️⃣ Real-Time Processing

Transaction processed instantly.

🟩 Example:

  • ATM
  • Google Pay
  • Railway ticketing
  • POS billing

🔷 1.7 TPS Examples in real life

🏦 Banks

  • ATM
  • Online banking
  • NEFT/IMPS

🛒 Retail Stores

  • Billing systems
  • Barcode scanning

🧑‍🏫 Colleges

  • Fee payment
  • ID card generation

🚂 Travel Industry

  • IRCTC
  • Airline booking

TPS is EVERYWHERE.
This is why this topic is repeated in exams.

🔵 2. OFFICE AUTOMATION SYSTEM (OAS)

🔷 2.1 Meaning

An Office Automation System helps employees do office work digitally instead of using pen-paper.

This includes:

  • Writing documents
  • Making spreadsheets
  • Sending emails
  • Scheduling meetings
  • Creating presentations
  • Storing files

🔷 2.2 Definition

👉 From Jawadekar:

“OAS are systems that combine hardware, software, and networks to enable office activities like documentation, communication, and data management.”

👉 Simple definition:

OAS helps employees work faster by using tools like Word, Excel, Email, etc., instead of manual work.

🔷 2.3 Components of OAS

✔ 1. Word Processing

Tools: MS Word, Google Docs
Use: Letters, documents, reports

✔ 2. Spreadsheets

Tools: MS Excel
Use: Calculations, charts, budgets

✔ 3. Email & Communication

Tools: Gmail, Teams, Slack

✔ 4. Presentation Tools

Tools: PowerPoint, Canva

✔ 5. Database Tools

Tools: MS Access

✔ 6. Document Storage

Tools: Google Drive, OneDrive

🔷 2.4 Why OAS is used?

  • Saves time
  • Reduces paper usage
  • Easy to edit & share files
  • Helps in teamwork
  • Improves communication

🔷 2.5 Examples of OAS in real life

  • Office using Gmail + Google Drive
  • Teachers making PPT in PowerPoint
  • HR sending offer letters via Word
  • Managers analyzing sales in Excel

🔵 3. KNOWLEDGE MANAGEMENT SYSTEM (KMS)

🔷 3.1 Meaning

Every company collects a lot of knowledge, including:

  • Training material
  • Experiences of staff
  • Solutions of problems
  • Manuals
  • Guides
  • Best practices

A Knowledge Management System helps store and share this knowledge.

🔷 3.2 Definition

👉 From Goyal:

“KMS is a system that captures, organizes, and disseminates knowledge to create value and improve performance.”

👉 Simple version:

KMS stores important information so employees can learn from it.

🔷 3.3 Types of Knowledge

✔ 1. Explicit Knowledge

Written, easy to store.
Examples:

  • SOPs
  • FAQs
  • Notes
  • Manuals

✔ 2. Tacit Knowledge

Personal experience; cannot be easily written.
Examples:

  • Decision-making skills
  • Leadership skills
  • Negotiation skills
  • Troubleshooting experience

🔷 3.4 Components of KMS

  • Knowledge base
  • Search tools
  • Document management
  • Collaboration tools
  • Learning systems

🔷 3.5 Examples of KMS

✔ Infosys K-Shop

Stores knowledge of all employees.

✔ Hospitals

Store patient case studies.

✔ Customer Support

Store solutions for repeated issues.

📘 UNIT 3 – PART 2

ENTERPRISE INFORMATION SYSTEMS (EIS)

⭐ What are Enterprise Information Systems?

An Enterprise Information System is a type of system that supports the entire organization across all departments.

It:

  • Integrates data
  • Connects departments
  • Improves decision-making
  • Supports long-term planning
  • Automates large processes

EIS is very important because modern businesses cannot survive without it.

Departments using EIS:

  • HR
  • Finance
  • Marketing
  • Production
  • Sales
  • Logistics

Let’s study each system one by one.

🟥 1. HUMAN RESOURCE INFORMATION SYSTEM (HRIS)

(Most common exam question)

🔵 What is HRIS?

👉 HRIS is a computerized system used to manage all employee-related information and HR activities.

It maintains data of:

  • Joining
  • Salary
  • Attendance
  • Leave
  • Promotions
  • Training
  • Exit

It helps HR managers work faster and make better decisions.

🔵 Why HRIS is used?

Because manual HR work is slow and full of mistakes.

HRIS gives:

  • Speed
  • Accuracy
  • Centralized employee data
  • Automated payroll
  • Reports on performance

🔵 Functions (According to textbooks)

✔ 1. Employee Information Management

Stores personal, job, contact, and salary details.

✔ 2. Recruitment & Selection

Tracks job postings, applications, interviews, and hiring.

✔ 3. Attendance & Leave Management

Tracks:

  • In/out time
  • Leave balance
  • Overtime

✔ 4. Payroll Processing

Automatically calculates:

  • Salary
  • PF
  • Tax
  • Allowances

✔ 5. Training & Development

Tracks employee training needs, schedules, and results.

✔ 6. Performance Appraisal

Manages appraisal forms, ratings, and reports.

✔ 7. Employee Self-Service

Employees apply for leave, download payslips, update profile online.

🔵 Benefits of HRIS

  • Reduces paperwork
  • Saves HR time
  • Maintains accurate records
  • Improves communication
  • Reduces salary errors
  • Supports better decisions

🔵 Examples of HRIS

  • SAP HR
  • Oracle HRMS
  • Zoho People
  • Workday HR
  • Keka HR

📝 HRIS – Exam Answer (5 or 10 Marks)

“HRIS is a computerized system used to manage employee information and HR activities such as recruitment, payroll, performance appraisal, training, and attendance. It improves accuracy, reduces paperwork, and supports strategic HR decisions.”

🟧 2. MARKETING INFORMATION SYSTEM (MKIS)

🔵 What is MKIS?

👉 MKIS is a system that provides information required for marketing planning, forecasting, and decision-making.

Marketing involves:

  • Understanding customers
  • Studying competitors
  • Finding market trends
  • Running promotions
  • Improving sales

MKIS supports all this.

🔵 Components of MKIS

✔ 1. Internal Records

Sales data, customer data, past performance.

✔ 2. Marketing Intelligence

Information collected about:

  • Competitors
  • Market trends
  • Customer behavior

✔ 3. Marketing Research

Surveys, interviews, questionnaires.

✔ 4. Analytical Tools

Forecasting models, dashboards, analytics.

🔵 Functions of MKIS

  • Support marketing strategies
  • Identify new market opportunities
  • Track competitor activities
  • Study customer preferences
  • Improve promotional campaigns
  • Forecast demand

🔵 MKIS in real life

Examples:

  • Amazon recommends products using MKIS
  • Swiggy learns customer taste preferences
  • Flipkart analyses sale peak hours
  • Coca-Cola studies customer buying behaviour

📝 MKIS – Exam Answer

“MKIS supplies managers with data regarding customers, competitors, and market trends to support marketing decisions such as pricing, promotion, distribution, and sales forecasting.”

🟦 3. FINANCIAL INFORMATION SYSTEM (FIS)

🔵 What is FIS?

👉 FIS is a system that manages the financial activities of a firm.

Finance deals with:

  • Money
  • Investments
  • Cash flow
  • Accounts
  • Budgeting

So FIS helps handle all financial records and decisions.

🔵 Functions of FIS

✔ 1. Accounting & Bookkeeping

Invoices, expenses, payments, receipts.

✔ 2. Budgeting

Future planning of income & expenses.

✔ 3. Financial Reporting

Balance sheets, profit & loss statements.

✔ 4. Tax Management

GST, TDS, income tax management.

✔ 5. Auditing

Internal and external audit support.

✔ 6. Cash Flow Management

Tracking inflow and outflow of cash.

✔ 7. Investment Management

Company investment tracking.

🔵 Examples of FIS

  • SAP FICO
  • Tally ERP
  • Oracle Financials
  • QuickBooks

🔵 Benefits of FIS

  • Accurate financial records
  • Better budgeting
  • Real-time financial reporting
  • Transparency
  • Reduced fraud & errors

📝 Exam Answer – FIS

“FIS is designed to manage financial transactions including budgeting, accounting, auditing, and reporting. It provides accurate and timely information necessary for financial decisions.”

🟩 4. PRODUCTION / MANUFACTURING INFORMATION SYSTEM

🔵 What is this system?

👉 It is a system that helps manage production activities in factories and manufacturing units.

Production involves:

  • Raw material
  • Machines
  • Workers
  • Scheduling
  • Quality
  • Inventory

This system helps manage all these.

🔵 Functions

✔ 1. Production Planning

Deciding what to produce, how much, and when.

✔ 2. Inventory Management

Tracking raw materials, semi-finished goods, finished goods.

✔ 3. Quality Control

Checking defects, quality reports.

✔ 4. Machine Maintenance

Schedules repairs and servicing.

✔ 5. Scheduling

When and how each job will be done.

✔ 6. Cost Control

Reduces waste and cost.

🔵 Examples

  • MES (Manufacturing Execution System)
  • SAP Production Planning
  • Toyota Production System
  • CIM (Computer Integrated Manufacturing)

📝 Exam Answer – Production IS

“Production Information System supports planning, scheduling, quality control, maintenance, and inventory management to ensure smooth manufacturing operations.”

🟦 5. CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

🔵 What is CRM?

👉 CRM is a system used to manage interactions and relationships with customers.

It stores:

  • Customer details
  • Order history
  • Complaints
  • Feedback
  • Communication

🔵 Functions

  • Improves customer service
  • Tracks complaints
  • Handles sales leads
  • Sends promotional messages
  • Maintains customer database

🔵 Real-life Examples

  • Salesforce
  • Zoho CRM
  • HubSpot
  • Amazon customer support system

🟧 6. SUPPLY CHAIN MANAGEMENT (SCM)

🔵 What is SCM?

👉 SCM manages the movement of goods from supplier → manufacturer → warehouse → retailer → customer.

🔵 Functions

  • Supplier management
  • Transportation
  • Inventory management
  • Warehouse management
  • Order fulfillment

🔵 Examples

  • Amazon SCM
  • Flipkart SCM
  • DHL SCM

🟪 7. ENTERPRISE RESOURCE PLANNING (ERP)

(This combines all systems)

🔵 What is ERP?

👉 ERP is an integrated software that combines HR, Finance, Marketing, Production, Sales, SCM in one system.

It removes separate systems and gives a single unified database.

🔵 Benefits

  • No duplication
  • One database
  • Real-time information
  • Better communication
  • Cost-efficient

🔵 Examples of ERP

  • SAP ERP
  • Oracle ERP
  • Microsoft Dynamics
  • Odoo ERP

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